Tuesday, October 04, 2011

Race to the Bottom Part 2

This meme won't die. People are still convinced that new ebooks are going to be priced at ten cents, and writers will starve, and this will cause a second Great Depression where banks will close and people will be forced to buy Kindles with food stamps, and then the earth will enter another ice age where all the bunnies will freeze to death.

Lots of doom and gloom here.

Barry Eisler has a non-ebook post on his blog about establishments, and how people within establishments serve one of two functions: those who work to further the actual goals of the organization, and those who work to sustain the organization itself. The latter are those who wind up running the organization.

Publishing is a perfect example of this behavior. This industry began as a way to bridge the gap between readers and writers. That was its goal. But somewhere along the line, legacy publishers began to worry more about sustaining themselves than connecting readers with books.

That's one of the reasons power corrupts. You begin to believe your own hype, which leads to a disconnect between your decisions and their results. If you have the power, you must be infallible, right? And even really stupid business practices, such as treating your content providers badly, allowing full credit for returns, never doing focus groups or pre-release testing, using purposely obtuse accounting practices, windowing titles, DRM, erights grabs, the agency model, etc. can't possibly hurt you, because You Da Man.

Publishers began to really believe that they were essential. And they managed to convince a lot of unpublished authors of the same thing. There are a whole bunch of people in the publishing industry, and trying to get into the publishing industry, who are confusing acceptance by that organization with what the original goal was: getting books in front of readers.

But publishers have always been middlemen, even though they had a lock on distribution and a filter on content. And middlemen tend to eventually get streamlined out of the Circle of Money.

Their locks and filters are now disappearing, and this is naturally scaring them. It's also scaring a lot of the brainwashed writers who work in the industry, or have been struggling to break into the industry. No one wants to believe the god they've been worshiping is about to die.

Enter the memes. Publishers, and their supporters, keep trotting out the same old BS about how the future will be bleak without them.

"You'll be nothing without me!" is the mournful whine of every jilted lover.

One meme is that the lack of gatekeepers will result in a tsunami of crap. Another is that writers can't succeed on their own. The meme I want to focus on is that continual price dropping will result in all ebooks being free and no writer able to make a living.

Let's look at some of the flaws in the race to the bottom meme.

1. There are still plenty of ebooks priced over $4.99 on the bestseller lists. Check any genre list, and they're there. So while it is true people would rather pay less than more, there are plenty of people willing to pay more. But, as we'll see, not too much more.

2. The sweet spot for ebooks may be changing. I've been charging $2.99 for novels because I've been making a lot of money. But I may be doing myself a disservice and leaving some money on the table. The goal is to find that perfect point that balances sales and profits. That means experimenting. In the past, I've been against charging more, because my own experiments showed it didn't work. But I've now seen other authors who it is working for, and that encourages me to experiment some more.

3. Some people may be conditioned to avoid lower-priced ebooks. Maybe they got burned on a shitty 99 cent novel. Maybe they equate higher price with higher quality (something we're all guilty of.) As long as there are folks willing to pay more for something they perceive is better, some authors will be able to charge more.

Another way of putting it: even if all ebooks are fungible and created equal, there can still exist a spectrum of prices. Take Blu-Rays. Some are $4.99. Some are $39.99. How new something is, how popular it is, the extras it has--people will pay more for these things.

4. If all ebooks become free, we'll still make money. There has been a lot of talk about subscription models, or ebooks funded by ads. Either way, the content creators (the writers) are still the essential part of the business. We'll find a way to get paid.

5. Legacy publishers aren't helping anyone but themselves by pricing ebooks $9.99 and over. This high price is to protect print sales, and suck as much money from readers as they can before the house of cards collapses.

Readers don't want to pay $9.99. They've been very clear about this for several years. The $9.99 boycott, and associated 1 star reviews, is still widespread. As a result, books priced at $9.99 or higher don't sell as many copies as they could, and the author misses out.

$9.99 isn't the sweet spot.

6. There can't ever be a true race to the bottom, because books aren't in competition with each other. This isn't a zero sum game. Never has been. When readers find something that interests them, it is never either/or. If they find two books to be interesting, they read both books. And since ebooks are cheaper than paper, and it has been widely reported that those with ereaders buy and read more, the pie is actually getting bigger. We can sell to a smaller percentage of ereaders and still make a killing.

Sure, we all have limited leisure time. We all have limited lifetimes.

But if you like reading, you fit it into your life. Just like you fit anything else you like into your life. I've never met a single reader--and I've met thousands--who said, "Well, I can read this OR that, but I'll certainly never have time to read them both, because time is finite."

That "not enough time" meme is bullshit.

Now, we're still in the early adopter phase of ereader sales. The prices haven't sorted themselves out yet. Which is why experimentation is essential. As self-pubbed writers, we need to try different price points, and compare notes, in order to find that sweet spot. I just released a 35k word novella, EXPOSED, for $2.99. My next novel will be $3.99.

Lower prices may sell more copies, but they leave money on the table because people would have paid more. Higher prices may have a larger profit, but they also leave money on the table in missed sales.

Your goal, as a self-published writer, should be to keep an open mind, and always remember this is a business, not an ideology.

The is no race to the bottom. It's just a bunch of scared people who need to regurgitate false memes in order to feel safe.

121 comments:

I agree. I've raised prices on some titles from $2.99 to $3.99 and seen no change. But I think the magic number is $4.99. I just don't have anything over that. My historical epic at 175,000 words is priced there and selling well, because it's essentially the length of two novels and my only eBook at that price. The extra pricing in the agency model goes to pay all the middlemen and women. If they aren't there to take their slice, I think the pricing model works.And the loathed .99 price still works as a lead to a series. I've got two books at that and will be leaving them there. They build my broad base of readers.Publishers still don't accept the ebook is the new mass market paperback without printing and returns. Even that model was getting outrageous with $8.99 price tags on a paperback.The eBook business is very streamlined, but publishers aren't.

I thought it was pretty ridiculous when I heard someone say that ebooks would eventually be practically worthless. I told that person that writers would find another outlet if that were the case...or simply start raising their prices again. I like being in control of my own pricing.

When Joe released his novella Exposed for $2.99, I left a comment about how he said that novellas should be priced at $0.99. But Joe makes an excellent point in this post about trying different price points because we might be 'leaving money on the table.'

Another enlightening post, Joe. Thanks for the insight and information. I'm at the beginning of my self-publishing journey and am experimenting with price points for individual titles ($0.99 and $2.99) as well as plans for a combined collection ($3.99 to start) ... all based on tips that I've read here. I know that I'll continue to tweak things as time passes and I continue to learn from established writers like you, Blake Crouch, etc.

I couldn't agree more. Seth Godin argued some time ago that even the model for print books is wrong. The paperback should come out first to test the waters to be replaced by the hard back later for best sellers. I think you're right on and we should experiment with price and with alternative models.

Even in today's ebook world we have some limitations. I can't raise the price of an ebook on Amazon without pulling it and substituting it with a different edition for example. There is also a risk that distributors like Amazon will become the new demon du jour as they become the new middlemen.

The 99 cent model may work for some, but it didn't work for me. I actually get more feedback at higher prices than lower ones. I make more money. I get better reviews.

Why? I think that people will throw away a buck on something that isn't really their thing - then complain. If they spend a dollar or so more, it's more of a conscience choice. They paid more, so they're actually more apt to read it. I know am. If they read it and love it, word of mouth grows quickly.

But, it's a crap shoot. Each writer has to find their OWN sweet spot. The beauty of what we do is that we can play around with price points.

I couldn't agree more. If anything, eBooks will find a nice cozy price niche bwtween the .99 and 9.99 extremes. I have one title live on amazon (thanks to your blog) and plan to bring out the next one before Chistmas. I was tempted to drop the price from 2.99 to .99 but I figured it would just give the reader the impression that I'm selling them 92 thousand words of crap.

My reviews are good so I'm staying the course at 2.99 and when I have more titles, sales should pick up.

What the big publishers are doing with the 9.99 price point is drive readers to experiment whith indies.

They actually wanted $14 for the eVersion of Bourne Identity vs 9.99 for the paperback. I read The Fly Guild by Todd Shryock instead.

It's great that you got back to this subject, as I've been one of the ones concerned about the race to the bottom meme.

(I don't know who coined that term, but I wouldn't call it a race all the way to the bottom.)

What I do think everyone has seen, is that prices have come down. How much of it is due to establishments (like the blog on that!) losing their cut, and on the other hand to new previously unpublished writers, will probably be unknown for awhile.

I even think a guru hereabouts himself wrote "The prices haven't sorted themselves out yet."

I for one will never believe all ebooks will become free, but I think there are lots of signs that free ebooks are now an increasing phenomenon. Where that will end up at I have no idea, it's just a notion of another tool in the competition for exposure.

Much awareness should be given to the "read what you want for a monthly subscription", if they don't pay the writers what they should be getting; re: Spotify and musicians. Although Spotify has already pretty much killed iTunes in some parts of world and even hurt piracy (can you say that? ;)), so the model in itself is interesting.

The cream will always rise to the top, and la crème de la crème on top of that, and there's always the ones who like milk anyway.

Pricing is going to be something that people will argue about forever. As far as the race to the bottom, it will never happen with a eBook that is taken care of. Promoting, marketing, and releasing quality new works will prevent this.

Authors who self publish but either have something fundamentally wrong with their work (editing, formatting, cover) or abandon it because they were not instant superstars will have their work fall into murky depths. The price tag of these books is irrelevant.

My first novel (89k words) will be out in early November. I'm pricing it at $3.99. I'd already picked the price because I believe it is worth that much based on my reading of books at a number of prices. This post supports my decision.Personally, I can't believe that an industry (ebooks) that has barely begun, is going down the tubes. I believe the opposite. 2012 will be a breakout year for ebooks. The first clue is not one, but two Kindles below $100. Christmas will be big for us.My advice is stop wasting time and write!. I have two short story collections that will be out by Christmas and a new novel outlined and ready to write. Gotta go, Chapter 2 in the new book is calling.

Any new insights on the Amazon "you're not in the US, so we're gonna charge you more"-tax?

EXPOSED is $5.74 for me, in Sweden, if I purchase it from the US website. But the price increase is not all the way across the board anymore. ORIGIN is $2.99.

I believe it was you, Joe, that said that it was some sort of fee for downloading the ebooks via 3G. But that doesn't fly, as I don't have a real Kindle and is downloading to my PC and iPhone. And I'm paying my ISP's for that data transfer, it doesn't cost Amazon anything more than if I was in the US.

I emailed Amazon about this a while ago, and after several template responses that didn't even remotely answer my question, I finally got the reply that they didn't know how $.99 and $2.99 magically transformed into $3.44 and $5.74, respectively.

Ah yes, the zombie meme that digital publishing will leave us all in the poorhouse. It's funny that this should surface at a time when self-publishing has allowed more writers to make a living than ever before, isn't it :)

I will be interested to see the results of your experiment. I know several writers on Kindle Boards have been experimenting with higher prices. I don't think the results were uniform (or that scientific, really), but I think most were happier with the higher prices.

One thing you should keep your eye on is this: some reported that when they shifted to a higher price, they started appearing in different "Also Boughts". Instead of the usual indie or small publisher fare, it was Big 6 books. They felt that this exposed them to a new and different audience.

Something to watch.

Dave

P.S. I'll be releasing a new novel myself soon enough. I'm pricing it at $4.99. Like Bob's book, it's an epic historical, and I think the genre can handle higher prices.

People pay money for perceived value. If ebooks had zero value, of course the race to the bottom would happen. But they DO have value. They give the reader entertainment, education, experience, and a million other things.

Even in highly competitive markets, like video games, for example, (which has the same issue of being completely intangible) there hasn't been a race to the bottom. Video games cost as much as ever, if not more. Some alternate business plans have cropped up, but for the most part, games cost just as much as they always have.

"There are a whole bunch of people in the publishing industry, and trying to get into the publishing industry, who are confusing acceptance by that organization with what the original goal was: getting books in front of readers."

This rings so true; I suspect most of us have fallen for this myth for too long. But no more; I for one have just self-published two ebooks - more are already being planned - partly inspired by what you've been writing in your blog. They've already started selling, whereas before the stories were just sat on a shelf gathering dust. So thanks for that!

When musicians release their work via YouTube or downloads, has anyone claimed that all music will become free and that composers will starve? No, it's helped to sell lots of otherwise-buried music to people who want to hear new music by new people. Is this really any different from self-publishing ebooks?

I tried the novella-at-99c, novel-at-2.99 price points, but just decided to raise the prices last month after following this blog, other Kindle authors, and DWSmith. And just as a reader, I had stopped even looking at the free or 99c titles unless I was already a fan.

My results (limited and unscientific, of course) were that my sales went up. Not to mention my profits.

I love the discounts for the first in a series, or for a popular book for a limited time, or to celebrate the release of a new title. But for its set point? I like the $3.99-5 range. I'm grateful we can experiment.

I'm all for Joe doing whatever will earn him the most money, but I'm hoping he doesn't go Netflix by drastically raising his prices in the near future.

Like many readers, I don't mind paying more for authors that have earned my loyalty, but the beauty of a Konrath/Kilborn ebook (aside from the entertainment value of the stories themselves) is the delicious thrill of the impulse buy. I consider it the equivalent of picking up a Butterfinger at a gas station or supermarket checkout lane; for a negligible amount of money, you get a quick, fun treat that boosts your mood and makes your day just a little better. That's absolutely worth $2.99, but if I'm asked to pay too much more, the good feelings may start to fade a bit.

Keep in mind that this isn't my polite way of saying that Joe writes disposable entertainment that should be priced as cheaply as possible. Not at all--I'm a fan. It's just that, in the crowded field of commercial fiction, there are "steak dinner" novelists, and then there are "Butterfinger" novelists. I would place Joe squarely in the second camp, and believe me, that's not an insult. But I do feel the current price of Joe's novels is a great value for the type of entertainment experience they provide. Still, if he can earn more by charging more, I won't fault him for that.

You can sell bullshit sandwiches that give cancer with good enough marketing.

One thing I agree with you, JA, is that publishing is luck. Stick to that statement, please, unless all the other statements you make are purely for comedic value (if so, then you are successful, because I do read your posts to get some smiles going).

Unlike Joe I'm not a prognosticator, but I sure hope he's right again on this one. I've gone round and round with myself over whether to up the price on the new romance I'm releasing later this month from the $2.99 of my others to $3.99. The fact is I'm delighted to find anything I like for $4.99 or less, although I pretty much ignore free and $.99.

So I'd really, really like to get out of the cheap seats, but have finally decided this isn't the time for me to do it. Next book next year.

I think under $5.00 is a fair price, for most. Last year, I went to B&N to buy Brett Easton Ellis's follow up to Less Than Zero. The price was $25.00. I got pulled into a nook demo and ended up buying one(love it) So, rather than spending $25.00, I paid $9.99 for the same title. However, after I finished it, I felt ripped off. Now, if I had only paid $4.99, I would not have minded as much.

Just today, I downloaded 3 novels by an author I discovered via Facebook's Similiar page feature. $2.99 each (under 10 bucks for all 3) I know I would never have bought them for like $10 bucks a piece plus shipping. Because I bought from Smashwords, the author gets a good share of that $. So it's a win/win for all involved.

@ Doug Lance "Even in highly competitive markets, like video games, for example, (which has the same issue of being completely intangible) there hasn't been a race to the bottom. Video games cost as much as ever, if not more."

Although comparing industries is often irrelevant, I'd like to point out that you're not entirely correct. Some video games still cost what they do, but you can get Angry Birds (Combville, anyone?) for 0.99 or for free depending on your system. A big boss at a gaming company said the apps are killing quality games.

I impulse-buy anything under the paperback cost (so generally books in the 5.99-7.99 range). I actually don't tend to buy a lot of books in the .99-2.99 range, though I do sometimes (many of the "indies" I read are either free or are pricing at 4.99-6.99).

I do think that the genre matters a little. The top 100 in general Mystery/Thriller on Amazon when I checked it had 56 titles priced 7.99 and up (30 of those titles were over 10 bucks).The Contemporary Romance top 100, on the other hand, had only nine titles over 7.99 and the bulk of titles (29) were between 3.49 and 4.99 while 26 titles were .99 and 23 were 1.99-2.99.Fantasy general top 100 had the bulk priced between 7.99 and 8.99 (36 titles) with another 20 at or over 9.99.SF ranged lower, with 25 titles at .99 and 27 between 1.99 and 2.99.

So it probably depends on a lot on genre. I know that in Romance, we're used to reading shorter works for cheaper (novellas are pretty popular). Same with SF (where again short stories and novellas are fairly common, though I didn't make the distinction when looking at the top 100 lists, so I am not sure on length of the books included).

For my own pricing experiments, so far I sell the same at 4.99 as I do at 7.99 (I only have one novel and it sells about 5-10 copies a month across all sites). I figure when I have more books out and get some series up (and series in more popular genres), it will be easier to see how pricing shakes out.The fun part of doing it myself is that I can experiment and try different things. Nothing is ever set in stone.

I've never met a single person who was choosy over what to read because they were worried they couldn't read everything they wanted to. Not. One.

Hi, my name is Adrian, and I'm extremely choosy about what I read because there isn't time to read all the stuff I want to read.

I'm the same way with movies and television as well. It's fall, and I spent time studying the new TV pilots and very consciously limited myself to sampling just a few so that I wouldn't get hooked on too many new shows.

I've also stood in line at the bookstore, realized that I was holding months' worth of reading material, and walked some of the books back to the shelves. It's not about the money. It's all about the time.

You're unique, Adrian. The rest of the world has TBR piles and still keeps buying more books.

As I've mentioned before, the world already has more media than any person could ever absorb in their entire lifetime. But we make time for what interests us. Unless you are monumentally busy, which I doubt because you're commenting on my blog and said you spend time studying new TV pilots.

And if you've truly returned a book you really wanted to read because you didn't have the time, why are you still looking for new shows to watch and buying new books?

Readers don't want to pay $9.99. They've been very clear about this for several years.

Here's what I've noticed: if a book is priced at $.99, most of the also-boughts will be priced at $.99. If a book is priced at $9.99, most of the also-boughts will priced at $9.99 (or even higher). So it seems the book-buying public is divided. There are bargain hunters, and there are those who will pay the price for what they really want.

I'm guessing the sweet spot for quality work will eventually find ground somewhere in the middle.

Thanks for the post, Joe. It's true, we are still in the early phase of this and need to adjust our attitudes and opinions accordingly.

I'll be releasing Book 2 in my Gateway Series and plan on putting Book 1 on sale for $.99, at least for a month. (Usually $2.99) I've also thought about putting Book 3 at $3.99. My reasoning being, if you like the series enough to go for Book 3, it's worth that small sum. If you didn't care enough to find out how the story ends, then at the point, the cost of the reader's time is more precious than any price I'd be charging.

There are bargain hunters, and there are those who will pay the price for what they really want.

For the first time in my life I'm going to agree with Jude. And believe me, that stings. But I'm thinking more and more that price is going to level out around 5 bucks. The readers out there who buy a .99 book and expect it to be a quality product are fooling themselves. ...they get what they pay for.

A big boss at a gaming company said the apps are killing quality games.

No, big gaming company bosses pushing tired old crap are killing quality games. I haven't seen many real 'quality games' in the last few years as pretty much everything released on the PC these days is just a port of a lowest common denominator console game which is probably either a sequel or a a ripoff of whatever the most recent successful game happened to be.

As for game prices, I don't remember the last time I paid more than $5 for a PC game precisely because they're not worth any more to me than that. With the rise of online game distributors who have regular sales I can guarantee that it will be available at that price within a year or so after launch and with the increasingly punitive DRM combined with the nickle-and-diming DLC the value of the average game has dropped through the floor.

Indy games aren't killing the big names just because they're cheap, they're killing the big names because the big names are shovelling out expensive crap.

Perhaps I'm just odd. Or cheap. I've been called worse. But I will, indeed, choose only one book if I'm equally interested in two if I feel I can't afford both. As I get by on a very skimpy and limited budget, I frequently find myself choosing only one. Sometimes I find myself choosing neither because I need that $5 for a prescription.

That's down to the $2 surcharge Amazon place on most e-books for international customers (outside of Canada, Australia, Ireland, UK, New Zealand and the Amazon Germany countries) with 15% VAT added on top of that (Luxembourg rate applies across EU because Amazon "sell" the books from their office there).

If you log out of your account and go back to the book listing, you will see the US price.

As to why it is applied to some books and not others, that's a mystery to me. It's not just Joe's Books, some of Bob Mayer's have the surcharge, some don't. None of John Locke's that I checked have it. All of mine have it.

I'm guessing it's either (a) a glitch and they mean to capture them all (after all they have a legal obligation to apply VAT at least, (b) some older books snuck in before they instituted this system, or (c) they swallow these extra fees on books that are selling well to encourage further sales.

They used to apply the surcharge in Ireland (where I'm from), Australia, New Zealand and Canada, but abolished it late last year.

If you ask Amazon, they will give you a different reason all the time.

Two thoughts: 1) I'm old enough that I remember (fondly) the days of $4.99 for a paperback. With ebooks the new paperback, I'd like to see them surf up to that level, overall. 2) the sample has changed the game entirely. It takes care of the '99 cent books are bad' meme. You never have to buy a book without at least getting 3 chapters under your belt. I download samples, read them, and buy what appeals to me. I'm pretty sure I'm not alone in that :)

The race to the bottom is a myth, and it's not even a very interesting one. We already know that loyal readers will pay a fair price for authors they love regardless of how many other less expensive or free options are competing.

I've been asking around, and for what it's worth, most people I talk to who are non-writers but are kindle or nook enthusiasts seem to see no difference between 2.99 and 4.99. I think five bucks might be the psychological line.

Between the high price and the shit cover, that book won't start to sell until I get the rights back and do it right.

I don't think the Timecaster cover is so bad, but I'm sure the self-pubbed Timecaster 2 cover will reflect what you thought the first one should look like.

I enjoyed the book a lot - I was glad my library had it since I certainly wasn't going to pay the $7.99 e-price for my Nook.

However, I didn't even think twice about heading to B&N.com and purchasing Exposed for $2.99.

Sweet spot indeed.

I have an e-TBR pile as high as the moon. But Exposed had no trouble jumping right to the top. I was about to start reading the whole Jack Reacher series, but the the John Rain series caught my attention, and moved ahead of Reacher.

But for the record, Rain didn't replace Reacher. Rain is just ahead of Reacher, as I still plan to read every Reacher book.

Just like King's Mile 81 was a $2.99 impulse buy (sweet spot!) that temporarily pushed aside Suckers (sorry Joe), and Spree will push aside Rain, or Reacher, or whatever else I'm reading whenever it comes out. But eventually I will make time to read them all.

It doesn't prove much since at best I sell a tiny fraction of what you do, Joe, but when I raised my novel prices from $2.99 to between $3.95 and $4.95, my sales actually went up slightly and, of course, so did my royalties.

Instead of raising your prices, think about the opposite. Hear me out - Kindles are now below $99. Every "smart" husband out there will be searching for the perfect gift for their loved-one for Christmas. How about a Kindle?

First thing the receiver will do is search the list of books on the Kindle Store. They will buy as many books as possible. How many $4.99 books do you think they'll buy? Probably not as many $.99 books.

Christmas Eve, set your book price to $.99, as an experiment. Not a rouse. Not a ploy. Not a scam. A legit cut in price on a good book for that new Kindle user.

When the holidays are over, your book is worth 3-6 times that price. But the holidays is the time to make money, gain readers, and enjoy your gift from Santa.

Seriously, I know of an unpublished author who just received an offer from a great small Midwestern press, which he turned down because he refuses to allow his work to be published unless he gets an offer from one of what he calls, "The Big 6." And don't even mention e-books in the same room with him.

Me? I'm busy getting my two out-of-print books formatted for Kindle and new covers designed. And I'm writing new books as fast as my little fingers can type, while holding down a full time day job. I don't know what sort of success, if any, I will have self-publishing my e-books, but I do know I am so looking forward to never again having my work butchered and intentions redefined by an irrational editor. I love the idea of being able to control my own work, set my own price, and let readers decide if my efforts are worthy of their dollars.

That cover is a generic sci-fi cover. It says zero about the content. That cover doesn't show the humor, the social satire, the sex, the drugs, the libertarianism, the non-stop action, the crazy animals and gadgets. Nothing at all. Just some future cop tool standing there, looking toolish.

Price point is a fickle beast. My novels are $2.99, my novellas are 99 cents and my poetry chapbook (plural in the future) will all be 99 cents. However, I agree Joe, that experimentation is great. My next novel will most likely be $3.49 or $3.99.

Something Joe and I were talking about tonight which bears mentioning and concern....it's no big deal to lower the price on your book as an experiment. But if you want to raise it, remember, Amazon will seek out low prices across all other e-retailer platforms and price-match. I'm concerned some Smashword-serviced retailers will be very slow or totally non-responsive when it comes to price changes (ahem, Apple)...has anyone here had experiences with this? Or has Smashwords quickly changed your prices as requested across all e-retailers?

One way the next meme can turn this argument around is regarding price point and buyer preference.

Of course $9.99 is too much for an e-book that has zero distribution and manufacture overhead behind it, after it's written of course.

Considering big name legacy authors (who have yet to leave their Big-6 homes in droves) $9.99 has a perceived value over the 15-10$ hardback, similiar to the Blu-Ray example. Applicable when a reader HAS to have Patterson or Robert's latest.

Clearly publishers are milking dollars for little more than uploading existing work but the argument could follow the "Indie writing is crap" line, therefor you're paying for a "real author."

Interesting to see how much longer this model will work for them.

No one can tell me the big name authors (no matter how well they've been treated by publisher's) AREN'T peeking over the fence and thinking: Hmm, 70% of $4.99 - $5.99 and no 15% cut?

I contend that Adrian is not unique, Mr. Konrath. You have a nice blog, and I agree with many of your thoughts, but I can't help noticing that several of them are wishful thinking at best and uninformed bigotry at worst.

As a university professor in a scientific field I find your out-of-hand dismissal of evidence objectionable. I abhor the established gatekeeper industry and support indie authors / developers / musicians / filmmakers / etc. with both hands, but you are actually doing the establishment a favor by not proofthinking your claims.

I, like Adrian, am extremely picky about how I spend my time. I have not watched TV shows in years due to their low quality. I rarely buy books that I have not researched in advance, and in fact cannot think of a single impulse purchase I've made in the past five years. I am not unique.

I may not be your target audience. But you never mentioned target audiences.

Perhaps because you and he are both sock puppets? Your words would carry weight if you used your Google ID. Otherwise, not so much.

As a university professor in a scientific field I find your out-of-hand dismissal of evidence objectionable.

As a university professor in a scientific field, perhaps you should show some of your evidence, or refute mine using logic and facts rather than simple contradictions and name-calling.

Also, since you're a learned man, you should know what bigotry means, because no definition of that word applies to me.

I've personally met thousands of booksbuyers at thousands of bookstores and events. I've talked to these people. I've witnessed their buying habits. The vast majority have TBR piles, and I've never seen a single book buyer choose between one or another when it comes to reading. Buying, sure, esp. when books are expensive. Then they buy later, or get it at the library. Or buy BOTH ebooks, since those are cheaper. Hence the experience of me and hundreds of other ebook writers who see the same phenomenon.

But the time argument sucks. If someone wants to read something, they make time. We're a consumer, materialistic society that collects, hoards, puts off until later, impulse buys, binges, and values leisure. If we want something, we get it, and if we want to do something, we do it.

Unless a doctor (who hopefully has a better understanding of science than you do) has given you eight hours to live, no one is going to think, "Well, I only have time to read this one book, but not this other one." That's a stupid premise. People will buy, and read, both.

in fact cannot think of a single impulse purchase I've made in the past five years

I doubt that, since your post shows very little impulse control.

Post as a real human being, and then learn how to debate. Until then, you haven't earned any respect from me, so you don't deserve any.

Now I'm betting another anon chimes in, doing an equally poor job of making a point. But conflict makes this blog fun.

Gee, I guess I'm the shopper Joe was talking about - with books anyway. If I see more than one book I want, I buy them all as long as they're under $4.99. And, yes, my tbr list is quite high, but eventually I'll get to all the books.

My Indie novel is priced at $3.99 and my Indie cozy mystery short story is at 99cents. I'm satisfied with those prices.

being published by legacy publishers in truth means only that someone who worked at a publisher liked your book. often that is literally a single person. but the illusion is that it means that your book is good because you cleared a statistically difficult hurdle. many authors don't care if their book is really any good, or if it actually sells well or not. a publisher picked it up, so that means the book was good, which means they are a good writer.

without the legacy publisher, authors will actually have to measure their work and hence themselves, with much more difficult metrics: whether not just one person but many people (readers) actually give a shit about the book or not. it won't be possible to hide behind the "but i got published" illusion any longer. and that is scary, terrifying even, to many writers. so yeah, one can understand why established writers, along with their publishers, are hoping to do everything they can to keep things are they are. it's not just publisher livelihood that is at stake, but author self-worth as well.

Youre right. joe has bigotry, yes, but only because he's 'big' as in 'out there' lead dog, and the 'tree' part is, well you know, for big dogs, they do need trees. And the O' part, well, it used to be O'Kon Rath. And the proper spelling of the attribute, if you dont mind, is Big O' Tree. It's a diminutive.

Oh and the Rath part, well just a caveat... it might not be just a metaphor. Fact is, between 'Toolcaster' and Big O' Tree, well the male side of Joe's clan [we hear through distant thunder] is quite well endowed in... ah... er, saws and planes and uh, other, you know, tools.

Another one of the 'unique' ones here. I do have a list of books to be read, but I don't buy them until the moment I start reading. Why would I buy, when I have them available to buy any time I want?Most of the people I know don't buy until they start reading either. There are a few people I know with piles of bought books, lying around unread. They're invariably older people, perhaps it's a habit left over from per-Internet days...

Great post,Joe, and very effective in laying to rest yet another piece of (stupid) "conventional wisdom". There's no such thing as a "race to the bottom" with a market blowing itself up in a puff of smoke!

Before I took up fiction writing I was an economist (still am, that's something you can't get rid of. I'm a Columbia graduate and let me tell you, there are a lot of theories, but one thing's certain: the laws of supply and demand are IRON!

As long as people read, they will want to pay for what they read, period. How you make them pay and what is what marketing is about. Notice the word "market" in that term...

If the number of people reading was downward trending, then we'd have something to worry about. Then youmight talk of a race to the bottom. But that is NOT the case! The NEA's latest survey shows that FOR THE FIRST TIME IN 25 YEARS MORE PEOPLE ARE READING! Somethinglike 9 million more people (I don't remember the exact number but it's in that range - I blogged about this)

And the data refers to...2008! That's BEFORE the ereader (and related ebook) explosion! I can't wait to read their next survey, but it is SO encouraging for us self-pubbed authors...

The pie out there is expanding, there's going to be a piece for everybody, and no reason whatsoever to give out the pieces for free!

So you're perfectly right in wanting to experiment more with prices to find the "sweet spot"

I haven't read all comments yet, but one thing stood out clear in your post:"I've never met a single reader--and I've met thousands--who said, "Well, I can read this OR that, but I'll certainly never have time to read them both, because time is finite."

Well, you're partly right. I've read some books several times, so it's not like you read a book only once - if it's good, you might read it again.

However, I have less patience with crappy writing. I used to hang in there, reading worthless prose and stale dialogue hoping it would get better, but I'm more discerning now. If a writer fails to draw me in from the beginning, they lose me as a reader. The book might become excellent by the time I reach the fifth chapter, but I'm no longer wading through four chapters of drivel to find out.

Nowadays, I download plenty of samples on my Kindle. They haven't resulted into many sales though - either the sampled writing was horrendous, or the price of the ebook turned out to be way too high.

And what's up with the 2$ surcharge Dutch Kindle owners have to pay on ebooks?

Memetics is a concept dreamt up by Richard Dawkins about 35 years ago when he was writing “The Selfish Gene.” And a bloody good idea it was, too. One of the great ideas of the 20th century, it provides a way of understanding some human behaviour that is otherwise inexplicably crazy. Like the belief that a 2000 year-old collection of stories is ‘the word of ‘god,’ and can be used as a kind of Standard Operating Procedure for life in the 21st century. Or the militaristic foreign policy still being pursued buy the US as if they were living in medieval times, having to protect the fortress against vengeful attacks from their numerous enemies. Or the unwillingness to change a dysfunctional political system because ‘if it was good enough for the Founding Fathers, then it’s good enough for us.’ Or the refusal to admit that Capitalism is an unsustainable system and that the world economy can no longer be run like a giant Ponzi scheme. And the list goes on and on.

Maybe at some time in our evolutionary development it was beneficial to maintain the status quo indefinitely. And it was a way of passing information from one generation to the next. But, technologically, we’ve come a long way since those murky days and, for the sake of our own survival, we now need to be challenging the status quo at every turn. Memetics explains the mechanism of resistance to change and enables one to recognise a meme when one sees one. But it takes a Konrath to step on it and grind it into the dust.

@ Claude Nougat "I was an economist (still am, that's something you can't get rid of. I'm a Columbia graduate and let me tell you, there are a lot of theories, but one thing's certain: the laws of supply and demand are IRON!"

OK, I'll come out of the closet as an economist, too.

That's what I'm basing my worries on, the laws of supply and demand:

1) We should assume that the amount of reading time (demand) in general isn't increasing. Yes, people with new ereaders buy more, like they do to with other new playthings, but it's temporary and also a love-in with lower-priced books they may not even read at all.

2) We could assume that the amount of money people spend on books (demand) in general isn't increasing.

3) We certainly know that the amount of writers available (supply) is increasing.

I happily agree that it's not a zero-sum game, and there are opportunities of growth. But for the most part, income will be shared differently. Writers will in general get a better share of the market, the middlemen will do worse.

I'm not arguing to disagree. I'm just always interested in what could happen next, and willing to extrapolate.

@amsterdamassasin re: European Kindle book price hikes, see David Gaughran at 6:15 PM. I'd guess it's A, it seems so random.

I find your posts very interesting and useful for beginners. I started reading your blog about a month ago and since then I wrote every day more than 2000 words.Before that,I had many ideas that were lost because I felt I couldn't succeed.So, just stopped by to say "thanks" for sharing all these things to those who don't know where to start from and how to start. In a funny way, too.

You're absolutely right that the pie is getting bigger. I've had so many friends say that it's so easy to buy books on devices that they end up buying more and reading more, and they love that about ereaders.

Ask indie filmmakers how much they get off Netflix. It's minimal if anything.

The difference between a $500,000,000 movie and a $20,000 movie is about half a billion dollars. The difference between an ebook that sells one copy a month and an ebook that sells a million copies a month is mostly writing ability and marketing; the latter may be expensive, but the former is mostly a matter of study and practice and if you write good books and get a few people to read them then they will tell their friends and the word will spread.

You cannot make Avatar for $20,000 unless you have an awful lot of time and an awful lot of people willing to work for free, and if your movie with three people philosophising in a room rents for the same price as a $500,000,000 Hollywood blockbuster starring Big Hollywood Star Of The Month then you're screwed.

This is the reason why I pretty much quit working on indie movies to go back into writing; making an indie movie that more than a few people will pay to see requires a lot of money or an exceptionally clever story which can work around the limited budget... or at least some actress who gets naked and then becomes Big Hollywood Star Of The Month.

So ultimately there's little than an indie writer can learn from the experiences of indie moviemakers; they're very different markets.

The economic rules of supply and demand don't apply to ebooks, because there is an infinite supply. Popularity and scarcity don't effect prices.

I'm not sure the concept of S&D can be effectively applied to time, but it needs to be noted that ereaders are being sold at a much faster pace than new ebook titles are appearing. That means the amount of money spent on ebooks is increasing, which it has been for the past few years (at an alarming rate.) And ereader owners do read more, not necessarily because they have a new gadget, but because that gadget makes buying ebooks so cheap and easy.

I so appreciate your comments, Joe. You have been a huge help to me as I have started this journey. Thank you for helping me to see the pie is expanding and I need to just keep writing more really good books.

People don't want to read all books with the same amount of intensity. And the desires people have to read books competes with their desires for other things.

A reader may want to read the latest Lee Child, a LOT, and twenty other books, but that reader also wants to eat and shower and make money and watch a TV show and mow the lawn and a bunch of other things.

Sometimes, the desire to read the book is so great, they put all those other things on hold.

But most of the time it's not. All of these things take time. At some point the desire for to earn some money, make dinner, play with the kids, whatever, outweighs the desire to read the latest Konrath, as many delights as it may promise.

So you're wrong.

Readers make the decision every day to read this or that or not read at all because they don't have the time, given all their other desires and priorities.

Also, even though the pie for ebooks is growing, the pie is not infinite. Just as it isn't infinite for orange juice, cars, mosquito repellent or any other good or service known to man.

Your desire to open the eyes of those who are doing a Chicken Little with ebooks is great. But on these two topics I believe you're pushing your point so hard you seem to suggest that growth and opportunity means ebooks and ebook markets are going to behave like no other product know to man does.

I would just add, Joe, that unlike Print, E-Books not only never go out of print, but they also exist on your own personal Kindle "forever" once you download them. It takes a hell of a long time to reach 3500 books! I would also add that most shoppers don't shop on Kindle by looking for all books for .99 or whatever the price may be. They either look for a specific title and author they have heard about elsewhere, or they look at the latest top sellers, or they shop by genre. Therefore the main thing here is not about price point (though I agree an e-book should be under $5.00); it is about creative self-marketing and getting your name out there - and yes, I'm talking about books where the quality of the writing and the story is a given - this is not a post about crap. Anyway, if you do that, I believe the sales will follow eventually. -- By the way, Joe, you're in rare form today! Ouch!

@ Jussi:"@amsterdamassasin re: European Kindle book price hikes, see David Gaughran at 6:15 PM. I'd guess it's A, it seems so random."

David and I have already discussed this - I hoped Joe had an 'IN' with Amazon to explain to Amazon how they're screwing the Dutch [and the other Europeans who like to read English] with that ridiculous surcharge.

We all have a limited amount of time to live, and consequently to pursue leisure and entertainment.

My position is that if a person has an equal interest in two different books, they will not read one or the other. They will find time to read both.

Avid readers hunger for more books by their favorite authors. They devour everything they can, and still seek more.

Even an average reader can get "hooked" on a series.

The idea that people will spend less money on books because there are too many choices, or because they only have a limited amount of time, doesn't jibe with consumer habits.

Those who enjoy reading make it a priority. It is never a question of reading this OR that. They read both. And ereaders have made it cheaper and easier than ever to attain books.

This isn't a strawman. It's refuting the original argument.

At some point the desire for to earn some money, make dinner, play with the kids, whatever, outweighs the desire to read the latest Konrath, as many delights as it may promise.

I'm not debating that. I'm simply stating that if a reader wants to read two books, she eventually will. She'll have to read one before the other. She'll have to fit it into her schedule. But ultimately she WILL read both.

Also, even though the pie for ebooks is growing, the pie is not infinite.

Actually, it is. Writers won't benefit from infinity, because infinity is a long time. But digital books will sell as long as there is a human race, because there is no cost in copying and shipping, and they can never go out of print.

As for how we can benefit during our own lifetimes, ebooks are becoming a global market, and even selling to a tiny percentage of 6 billion people can make you really rich.

you seem to suggest that growth and opportunity means ebooks and ebook markets are going to behave like no other product know to man does.

They're behaving a lot like mp3s, which continue to increase in sales, year after year.

Movies also continue to sell. Over the past 20 years I've bough no less than 8 versions of The Evil Dead. It keeps being re-released, and keeps selling, even though the format keeps changing.

The home computer, the cell phone, the automobile, the mp3 player--these are technologies that became globally adopted, and more and more keep selling. I'm betting ebooks and ereaders will be the same.

I agree/disagree with the infite time argument. I always want to read more but honestly can't prioritize it over life's many other responsibilities, just like I can't prioritize a night of drinking, a week of scuba diving or a two hour nap every afternoon. I would give a lot to be able to read a book in one sitting as, seemingly, every thiller/action/mystery book reviewer in the Universe does.

Traditonally, when I bought from bookstores (which has been a looong time due to budget and Amazon) I was always very particular but my limitations were usually due to said budget. Yes I've always had a TBR pile of varying height.

Conversely, for every conservative or budgeted person like myself in line back at the old Borders/B&N with a single paperback and a trade magazine there was another person with a STACK of hardbacks.

$145.76? No problem. See you next week.

Now put me or someone like me in a Library, then I'm the one checking out with a stack of books. I usually don't get to read them all and will re-check them out or see a little fine, but time is definitely not a concern there.

In the $.99 to $2.99 arena I see readers leaning more towards the library model. Affordable, no apprehension over wasting $20 on a steaming sh!t pile hardback, one click and added to the stack.

i think there are two types of pies we're talking about here: the pie of total ebooks, which is infinite, and the pie consisting of ebooks that are actually selling well. this latter pie consists of the top bestsellers down to a lower point of "good sales." this second pie is really what matters and where authors want to be. this second pie is what is not infinite, as obviously not everyone who publishes an ebook will enjoy good sales.

the authors in this second pie are going to change as time goes on. it's currently filled with many mediocre writers because most of the best authors are still tangled up with legacy publishing. once legacy publishing collapses, those authors will encroach on the second pie and many of the mediocre writers who are currently enjoying good ebook sales will be pushed out.

so, the legacy publishing collapse will be great for readers, and not so great for the hacks and bad writers who are currently capitalizing on this current transition period.

I like it as well. Maybe this is where you and I are talking past each other.

The idea that people will spend less money on books because there are too many choices, or because they only have a limited amount of time, doesn't jibe with consumer habits.

The argument isn't that they'll spend less. If you think that's the point I was making, then that's probably what's causing the disagreement.

The argument is that they will probably spend MORE, but only up to a point. Lower prices and easier access don't allow readers to go from reading two books a month to two thousand or more. Books still cost money. They still take time to read. And there are still a lot of other things readers like to do besides read. This is why I have a two year reading queue in my office.

But it seems that you're saying not only will they spend more, but none of the things mentioned above matter now that we have a new format. Is that what you're saying?

As for forever being a long time, you're right, no reader or author lives forever. I really don't care if my books find a huge following 500 years from now. What's meaningful to most of us is the next few years. And market sizes, while they may grow, are defineable during those periods. The size of the market 30 or 50 years from now is beside the point when I want to make a living off my books now.

so, the legacy publishing collapse will be great for readers, and not so great for the hacks and bad writers who are currently capitalizing on this current transition period.

I'm still not so sure of a major collapse and am still privy to my humble "Big 4" prediction. The more experienced authors here with Legacy experience all seem to have long lists of publishing gripes but at the same time we hear about a lot of decent, intelligent hard working poeple within the legacy system.

I don't think you need to be an "insider" to see that the future is gloomy for traditional's, all you have to do is watch business news and see how changing markets have affected countless other business's.

I don't care what legacy types say in their press releases, blogs and interviews, even if they only have two misfiring brain cells in their heads, let alone Economics MBA's, they can see hard times coming.

Netflix and Redbox put dual, double-tap, stakes through the heart and brain of immortal giant, Blockbuster, who themselves executed a half dozen smaller rental operations. Redbox keeps trucking but Netflix gets greedy and raises prices, loses customers like crazy (including me) and now a re-vamped blockbuster, with an online Netflix model is looking to scoop them up.

Am I the only one that sees an ironic corollary here?

I think we'll start to see gradual transitions: changes in pricing models, one or two big name authors going indie with name editors and agents taken under retainers and then, when heads are rolling in NYC streets and the big signs are being torn down, we'll see dramatic changes.

true, there are bad writers in both camps. the difference is that bad writers in legacy publishing aren't making money, because they have to compete with good writers. in the current ebook pond, many crappy writers are making good money, because there aren't many big fish yet. Once the big fish arrive and start charging the same low prices for their ebooks, there will be trouble in paradise.

phrased another way, if you're writing crappy ebooks and making good money from them (as many currently are), don't assume that will last forever. it will not. invest your money wisely and enjoy it while it lasts.

======

so, the legacy publishing collapse will be great for readers, and not so great for the hacks and bad writers who are currently capitalizing on this current transition period.

But it won't be good for hacks and bad writers in legacy publishing either.

Man o man. I finished writing Chapter Two and you guys are still at it. I think it's time to brush aside the BS and look at the issue. Will you make more money at one price over another. Yes. What we don't know just yet is what price. This is basic price x unit analysis and will yield to experimentation.

But there is another issue, perceived value.

Back in the late 1940s a man named Edwin Land perfected a camera that developed its own prints, right before your eyes. It was magic. He took it to Eastman Kodak who told him that no one would buy a camera like that. Dejected, but not detoured, went to Florida and proceeded to make it himself.

Remember this is 1948 when a great dinner was under $1. He priced the camera at $35 dollars and it didn't sell. He asked the people looking at the cameras, why. They said that something that looked this nice must have something wrong with it, especially since it made magic pictures.

He raised the price to $159 (the price of a modest used car) and it sold like hot cakes. Americans especially know value when they see it. Value is not the same as cheap. It is the perception at a buyer is getting his money's worth.

Write good books, price them as high as the customer will allow.

Oh well, Chapter 3 is calling. Some bastard I dreamed up is about to kill a little girl and I have to stop him by the end of the chapter.

The 21st century man really is limited in the time he may spend on reading for entertainment. After the work, family, and other responsibilities he attends to, the limited time that remains for his leisure activities must be allocated wisely. So if he chooses reading as a hobby, he will be forced to cast aside many books of interest because he can only read so quickly. And when his reading is done during his refractory periods between youporn sessions, he cannot be faulted for taking months to read a novella.

I appear to be unusual, but I have absolutely no problem paying $15 for the Baen ARCs of my favorite authors. It's less than I would pay for an English book in the bookstore in my country, and they don't even carry those authors.

I find it weird that Americans, who normally make a lot more money than we do, are so price sensitive. Then again, maybe that's why they have more money than we do :P

A suggestion for indie authors and readers who find Amazon charging that extra $2 surcharge for foreign readers is hurting you or your readers.Check out other sales venues which do not charge Amazon's mysterious mean surcharge. Smashwords.com, or www.xinxii.com as examples. If your fave author has no books for sale there, directly ASK the author to consider listing their book there as well as on Amazon. These sites are good for adding to your sales - indie authors, and pay better royalties than Amazon too. Don't take my word for it, check them out.

Just a general comment for the posters who have equated being legacy-published and having bestseller status with writing better books. This is utterly simple-minded, since most bestsellers got there via massive promotion by publishers and not because they write particularly well. Occasionally, the reverse is even true.

This situation is precisely why many legacy-published authors who have not enjoyed the star treatment have become disaffected and are choosing to self-publish. Legacy publishing has done nothing for them while taking a huge share of the profits.Thank God we have options these days!

I'm beyond the age of impulse buying so there is no price besides free that gets me to pull the trigger. I have to think I will want to read the book to actually buy it, and that I will read it soon rather than some day in the distant future. There isn't time enough to read all the books so why buy one that I don't plan on reading in the next week or so? I can download the sample or add it to my wishlist.

I am probably in the minority on this though. It's why the advertising industry focuses on the 18-34 demographic and not my slightly older one.

I will say that as long as Amazon and others allow books to be priced at $0.99 there will be a lot of books at that price, and there will be a lot of readers who enjoy finding bargains at that price. It's not going away.

We pay $7-$10 for a 1.5 hour movie that most of the time sucks. Isn't a book worth more than 99 cents (unless of course it sucks in which case it might not be worth that). I'm glad to see people experimenting with pricing. I've paid 99 cents for some books that were so bad I deleted them. I've paid $2.99 for some e-books that I would have gladly paid double or more for. But I agree that I won't pay $10 or more for an e-book, no matter how much I'd like to read it. I'll get it from the library. But if it's under $5 and I can get it delivered immediately to my Kindle, then yes, I'll buy it if I want it badly enough.

I agree that if you want to read a book, you find or make the time. But I do think that there are degrees of wanting to read some books, depending on title, author, subject, interest-level. Sometimes it's enough for me to, say, read an informed review. I do think that the ease of kindle-buying and the generally lower prices increase the amount of reading, thus the amount of books sold.

People don't seem to realize how little the paper-and-ink publishers pay. My wife and I published a YA novel with Philomel, part of the enormous conglomerate Pearson Penguin Putnam. They promised to pay 10% royalty for hardcovers and 6% for paperbacks. But we didn't read the fine print. Philomel sold over 100,000 copies of this book in an imprint called PaperStar, and gave us a little more than a nickel per book! These were not remainders. This was regular publishing practice. Now assume we put that book on line as an ebook ourselves, pricing it at 99 cents. We'd get, from smashwords anyway, a 70% royalty, meaning each copy would make us 14 times what each PaperStar copy made us. So don't worry about pricing too low.

I have also experimented with price. I had my first book at $2.99 at first, then went the 99 cent route about a year ago. Sales were slowing though, but at the end of May, my book went free. When it went back to paid, I had a ton of sales on that one and the sequel at $2.99. After a few months of 99 cents, sales slowed again. My theory is that most of the readers who buy at 99 cents or get free books had already either bought, downloaded, or taken a pass on my book. So, I moved back to $2.99. Sales have slowed, but not as much as I expected, and I know it'll take awhile for my book to get back into the also boughts of other $2.99 and higher priced books, so I'm willing to be patient. Meanwhile, I'm working on the third book. It will be priced at $3.99.